JAY LENO, TONIGHT SHOW HOST: This week, they will flip the switch on the White House Christmas tree, which has over 25,000 lights on it -- one light for every CEO that's looking for a bailout.

(END VIDEO CLIP)

STEPHANOPOULOS: Hello again. We begin today in one of her final interviews as secretary of state, with Condoleezza Rice. Madam Secretary, welcome back to "This Week."

RICE: Thank you. Good to be with you, George.

STEPHANOPOULOS: So, you are not coasting in your final days. Just back from India and Pakistan, of course, after those horrific attacks in Mumbai.

And it was reported in the Pakistani press that you were quite tough with the Pakistanis. I want to show something that was written in "Dawn," the Pakistani newspapers.

It says that Rice told Pakistan, "There is irrefutable evidence of involvement of elements in the country in the Mumbai attacks, and that it needs to act urgently and effectively to avert a strong international response. Sources said she pushed the Pakistani leaders to take care of perpetrators. Otherwise, the U.S. will act."

What exactly did you ask the Pakistanis to do, and will the U.S. take unilateral action if they don't?

RICE: Well, I did say to the Pakistanis that the argument that these are non-state actors is not acceptable. In fact, non-state actors acting from your territory is still your responsibility.

Obviously, there are issues of arrests of people who might have been involved. First, of course, to involve themselves very transparently in the investigation.

There may have been support elements -- not of the Pakistani government, but within Pakistan -- that were helping these terrorists.

STEPHANOPOULOS: There's one report that said that you asked for them to turn over and arrest the former head of Pakistani intelligence.

RICE: Well, I don't want to get too detailed about this. This is counterterrorism work. And obviously, I don't want to tip their hand or ours.

But this is a time when Pakistan must act. They must act in concert with India, with the United States. Great Britain is helping.

The thing to remember, George, is that this is a civilian Pakistani government, democratically elected, good basis of legitimacy. They want to do the right thing. I was absolutely convinced that President Zardari, Prime Minister Gilani, the other officials with whom I spoke, understand that this is also Pakistan's fight, because Pakistan is trying to root out terrorism and terrorists within Pakistan.

So, I did feel that there was a good, strong commitment there. But now we have to see follow-through.

STEPHANOPOULOS: So, we need to see arrests.

And to be clear, if those arrests aren't made, if the perpetrators aren't brought to justice, do you believe that India has a right to take action?

RICE: I said to India that the issue here is an effective response.

And I understand the frustration and the anger in India. In fact, it felt a little bit to me like the United States post-9/11. I certainly understand that.

But in this case, there are actions that India could take that could make the situation worse. And we don't need...

STEPHANOPOULOS: A military strike.

RICE: We don't need a crisis in Southeast Asia. What we need is the two parties, Pakistan and India -- by the way, who have developed far better relations than they had when we faced this kind of crisis in
2001-2002.

And the good thing is that I do believe that there is a desire on both sides. India and Pakistan, despite their long history, they are really not each other's primary threat and enemies...

STEPHANOPOULOS: And that's the message the United States is trying to send.

But I could imagine an Indian official saying, wait a second. The United States has been sending drones over Pakistani territory, striking at Pakistan for months. Why shouldn't India be allowed to do
the same?

RICE: Well, again, the regional dynamics here are important to keep in mind.

We don't need something that will set off unintended consequences and a more difficult situation. And I do believe that India's leaders understand that.

This is not 2001-2002, when there was virtually no communication between the two countries. The leaders of India and Pakistan -- encouraged by the United States -- have gone a long way to improving
their relations.

In fact, the Pakistani foreign minister was in India just about the time of the attacks.

So, I think that this is something that can be worked through. But it requires strong action, and it requires strong action now. And it requires concrete action.

STEPHANOPOULOS: While you were in India and Pakistan, a new report came out by a commission that was set up by Congress to look at the connection between weapons of mass destruction and terrorists.
And it had an absolutely chilling conclusion. I want to show it for our viewers. It was called "The World at Risk" report.

And it said, "Unless the world community acts decisively and with great urgency, it is more likely than not that a weapon of mass destruction will be used in a terrorist attack somewhere in the world by the end of 2013. Americans' margin of safety is shrinking, not growing."

Do you agree with that conclusion?

RICE: Well, this is something that President Bush drew attention to some years ago, when he talked about the worst circumstances being the connection of the world's most dangerous people, terrorists, and
weapons of mass destruction.

But we've worked very hard at it. We've worked to secure stockpiles and materials in places like Russia.

STEPHANOPOULOS: But this commission said the threat is getting worse.

RICE: Well, I can't judge. I don't think any of us can judge what might happen by 2013.

But I can tell you that many steps have been taken, are working in the other direction. The wrapping up of the A.Q. Khan network, knowing that the A.Q. Khan...

STEPHANOPOULOS: In Pakistan.

RICE: ... in Pakistan, right -- a kind of rogue scientist who was a nuclear entrepreneur, selling materials across the world.

The fact that we are in the process of trying to secure and end to the plutonium-producing program in North Korea, which could be, of course, a source of proliferation of that kind.

The work that we've done with Russia and Kazakhstan and Ukraine, past after the Soviet Union collapsed. The fact that the Russia and the United States, President -- then-President Putin and President
Bush -- signed and have promoted a global nuclear terrorism pact, which brings a lot of countries into the business of sharing intelligence, information, and even operational capability against these threats.

The work that we've done to put sensors at international ports, so that you can pick up detection of this kinds of material...

STEPHANOPOULOS: A lot done. But Vice President-elect Biden said this week at that press conference, we're not doing all we can, or should do, to keep these lethal weapons away from terrorists.

RICE: Well, the structures are there. And we have much better intelligence capability on these matters, too.

Again, this is a really hard problem. And it's one President Bush...

(CROSSTALK)

STEPHANOPOULOS: Is it the greatest threat America faces now?

RICE: Well, it's certainly a major threat. I do believe that the worst thing that could happen is that nuclear capability were to fall into the hands of terrorists.

It's why we've worked so hard on this problem. It's why we've had alliances with countries like Russia, where there's a full understanding of this threat, as well.

And this global nuclear terrorism pact that the United States and Russia promoted, is, I believe, the very best way to make sure that you've got the cooperation of countries in trying to diminish what is undeniably a very, very difficult problem, and a very great threat.

STEPHANOPOULOS: In the 9/11 Commission Report, President Clinton
was quoting as telling President Bush, during that transition, that Al Qaida was the greatest threat he would face, and that President Clinton's greatest regret was not getting Osama bin Laden.

What do you believe is the greatest threat facing the country as President-elect Obama takes over? And what's your greatest regret?

RICE: Well, I still am concerned that every day the terrorists plot against us. We have to be right 100 percent of the time, and they have to be right once.

And I think it's hard maybe to understand that, if you were in a position of authority on September 11th, then every day since has been September 12th, and that undoubtedly an attack on the homeland
continues to be the greatest threat.

And we have to make sure that we keep in place the mechanisms to integrate our intelligence from law enforcement and from the intelligence community, that we're able to track these terrorists as
they plot and plan, that we're able to track their money, as we are doing through the financing of terrorism work that we do.

And so, there's a lot in place, but I think it remains my greatest concern.

STEPHANOPOULOS: How much does it matter that Osama bin Laden hasn't been caught or captured?

RICE: Well, everyone wants to see the day that Osama bin Laden is brought to justice. But this is not a one-man organization.

And I think we are more capable at dealing with Al Qaida, tracking and tracing them, cutting down their financial networks. And, most importantly, we've captured or killed an awful lot of their leadership. That really -- very coherent institution or organization that perpetrated 9/11, I think is really not intact any longer,
although they remain very dangerous.

STEPHANOPOULOS: President Bush said this week that his greatest regret was the failure of the intelligence in Iraq.

Would you -- is that at the top of your list, as well?

RICE: Well, it's high on my list, because we, and intelligence agencies around the world, thought we were dealing with something that turns out to have been a different kind of threat.

But I have other things that I would have hoped would have gone differently.

I'll tell you, I am still really appalled at the inability of the international community to deal with tyrants. We saw it in Burma. We're seeing it in Burma.

We are now seeing it, I think, in a very, very sad way in Zimbabwe, where Robert Mugabe should have gone a long time ago. And we can't seem to mobilize the international will to do it.

STEPHANOPOULOS: Is there anything you can do between now and January 20th to make that happen?

RICE: Well, I am going to continue to try to press in the international community. I even talked with my British colleague, David Miliband, just this morning about trying to see what we can do to get a renewed push to have this solved. They had a sham election. They then had a sham power-sharing set of talks.

Now you have a cholera outbreak. You have this cholera outbreak that could really endanger Southern Africa, not just Zimbabwe.

It seems to me, that when the international community makes a very big deal about the responsibility to protect, as we did a couple of years ago, and yet you have the Darfurs and the Zimbabwes, it is a
failure of the international community.

STEPHANOPOULOS: President-elect Obama appointed his national security team this week. And he seemed to hint at one of the failings of the Bush White House when he -- during that press conference.
Listen to this.

(BEGIN VIDEO CLIP)

PRESIDENT-ELECT BARACK OBAMA: One of the dangers in a White House, based on my reading of history, is that you get wrapped up in groupthink, and everybody agrees with everything. And there's no
discussion, and there are no dissenting views.
(END VIDEO CLIP)

STEPHANOPOULOS: Is it fair -- is that a fair criticism of the Bush White House, particularly in the run-up to the war on Iraq? And could you have done a better job in airing dissenting views on the
WMD?

RICE: Oh, we talked a lot about dissenting views. The idea that, somehow, within the Bush White House, there weren't dissenting views during this period of time is simply not true.

But the intelligence didn't permit, frankly, much in the way of alternatives for the weapons of mass destruction.

Now, the...

STEPHANOPOULOS: Although the dissent inside the National Intelligence Report from the State Department and others did point out...

RICE: But, you know, if you read...

STEPHANOPOULOS: ... that there were real questions about the intelligence.

RICE: George, if you read those -- go back sometimes and read that it was not a dissent on whether or not he had chemical weapons. It was not a dissent on whether or not he had reconstituted his
biological weapons capabilities.

STEPHANOPOULOS: Certain dissents on nuclear program.

RICE: On the nuclear side, one had to look to the intelligence community to resolve and present to the president a unified view that was their best estimate of what was there.

But we have -- what the president has done as a result of that intelligence failure, as well as the intelligence problems of September 11th -- is to restructure dramatically the intelligence agencies with the director of national intelligence now, that really does bring those views.

I've read these reports now. They very much more clearly put forward alternative views. They very much more clearly take the information and say, what else could this say?

The fact is that, before 2003 and the decision to take Saddam
Hussein down, there had been a worldwide assessment and assumption that he had these weapons of mass destruction.

STEPHANOPOULOS: At least biological and chemical.

RICE: Well, and actually -- you know, this is somebody who had used them.

STEPHANOPOULOS: Karl Rove said this week that had the intelligence been accurate, the United States would not have invaded Iraq. Do you agree with that?

RICE: Well, I think that there were a lot of reasons to get rid of Saddam Hussein. Yes, weapons of mass destruction in the hands of this man was a real danger.

But he had also invaded his neighbors twice, had tried to destroy Kuwait. He'd drawn us into war three times. He was a murderous tyrant to his own people.

And, he sat in the center of the Middle East, this troubled region.

STEPHANOPOULOS: But given all that, Karl said, absent the weapons of mass destruction, it would have been much more likely that he would have pursued creative ways to contain it.

RICE: Well, we did pursue creative ways to contain it. One has to remember that we tried everything from enhanced sanctions, an effort that Colin Powell led when he first became secretary of state.
We tried to get him out by other means on the eve of the war.

But in fact, this seemed the course for somebody who combined weapons of mass destruction, which we believed he had, and his murderous tendencies...

STEPHANOPOULOS: So, you think we would have gone anyway.

RICE: George, one, you don't have that luxury. You don't.

You know, it's fine to sit and try and play mind games, and to try to recreate -- and what might we have done here or there. But that's not the world that we were living in, in 2003. We were living in a post-9/11 environment, in which it was very clear that you shouldn't let threats multiply and collect without acting against them.

We were living in an environment in which Saddam Hussein had been required time and time and time again to come clean about what he was doing.

I remember Hans Blix saying, you know, this is -- mustard gas is not marmalade. You ought to be able to say what you did with it.

And so, it's fine to go back and say to yourself, would we have done this differently. You don't have that luxury.

STEPHANOPOULOS: Have you had the chance to talk to Senator Clinton yet?

RICE: I have. And...

STEPHANOPOULOS: And?

RICE: She's -- well, I've known her for a long time, ever since she brought her freshman daughter to Stanford, when I was provost at Stanford. I think she's going to be terrific.

STEPHANOPOULOS: What about this model? Bring back really an old model for secretary of state. A politician at the top of her game. You know, we saw back in the 19th century, Clay, Webster, Calhoun --
all these secretaries of state.

At this time, is that political background a plus or a minus?

RICE: President-elect Obama has made his choice, and he's made a terrific choice. Hillary Clinton is somebody of intelligence, and she'll do a great job.

She also has what's most important to being secretary of state, and that is that you love this country, and you represent it from a basis of faith in its values. And I know that she will do that.

I've watched her -- I watched her do it at the conference in Beijing on women. I know that she was someone who felt strongly about the Balkans and the need to stop that terrible killing there.

So, from that point of view, she's going to be great.

STEPHANOPOULOS: Your trip this week wasn't all work. You got the chance -- I want to show everybody here -- you got the chance to play piano for the queen.

RICE: Yes.

STEPHANOPOULOS: Now, the queen said that you were even better than she expected. She didn't know you could play the piano so well.

You have, in about a month, a little more free time.

RICE: Yes.

STEPHANOPOULOS: What are you going to be doing besides practicing the piano?

RICE: Well, I'm going to go back to Hoover, Stanford University -- back west of the Mississippi, where I belong.

But as secretary of state, I've had the chance to represent this great country. I've also had a chance to reflect on its strengths and its challenges.

And I've long been interested in issues of education -- and I mean K-12 education -- because I really do believe that, if we don't prepare our people for the concerns, the jobs of the 21st century,
then we're going to turn inward, we're going to protect. And if the United States turns inward and protects, the whole world will. And that'll be a bad thing.

And I also believe, George, that the United States -- this great multi-ethnic democracy, which I really do believe people around the world look to for inspiration -- this great, multi-ethnic democracy only works, if our great national myth -- that upward mobility is possible for every person, it doesn't matter where you came from, it matters where you're going -- if that's true.

And I worry that the state of public education is such that that's increasingly not true for every kid. So, I'll go back and work on those issues, and play the piano in my free time.

STEPHANOPOULOS: Well, good luck with that, and thanks for your time today.

RICE: Thank you very much. Good to be with you.

STEPHANOPOULOS: Now we turn to the economy. Friday's jobs report that more than half a million jobs were lost last month jolted Congress back to work on a bailout for the auto industry.

The White House and congressional leaders hope to have a new plan voted on this week. And for more on that, let me welcome the head of the United Auto Workers, Ron Gettelfinger.

Good morning, Mr. Gettelfinger. Are you confident that Congress is going to pass you a lifeline this week?

And what will happen if they don't?

GETTELFINGER: Well, good morning, George, first of all.

And, secondly, we're very hopeful that Congress and the administration will be able to pass legislation that will help us out of this economic downturn that we're in.

Obviously, we would not have been in Washington if we didn't need assistance in the industry. And I fear a collapse of General Motors and possibly Chrysler. And it could have a very negative impact on
Ford.

STEPHANOPOULOS: But even if this lifeline they're talking about, right now, is passed, that's likely to take the Big Three only until the early part of next year, when President-elect Obama will become
president.

He said again, just this morning, that all the stakeholders, including labor, have to recognize that there is not a sustainable business model, now, for the auto industry, and that everyone is going
to have to make concessions.

I know you've made many concessions already, but what else are auto workers prepared to give?

GETTELFINGER: Well, first of all, I agree with President-elect Obama that all the stakeholders do need to come to the table.

If you look at the standpoint -- from the standpoint of the UAW, you know, George, in '05, mid-contract, we went to first base; '07, we went to second base. Just this past week, we went to third base.
Nobody else is even in the ballpark yet.

So what we need to do is need to get all of the stakeholders together and talk about what it is that must be accomplished here.

And we're willing to do that. We've made that clear more than once, and we have repeated that, over and over.

STEPHANOPOULOS: Senator Bob Corker of Tennessee has said two things have to happen for any kind of a bailout to go through. He says that the auto workers have to bring wages immediately in line
with companies like Nissan and Volkswagen.

He also says that those payments that GM has to make to the benefits, the $23 billion in payments, that half of that should be in equity, not cash.

Are those conditions that the United Auto Workers are prepared to meet?

GETTELFINGER: Well, first of all, I'm not sure exactly what we mean when we say bring wages in line. Even going back to '06, it was stated that some of the companies -- at least one of them -- that the
wages was better than what the UAW members were making. So that's one point.

And then, on the second point, as far as the Voluntary Employee Beneficiary Association, you know, it's incumbent on us to see what's going to happen on the balance sheet of the companies, before we can
go into those negotiations.

Now, George, I want to be very clear. We stated, just this past week, that we were prepared to sit down with the auto companies and work out stretching out those payments.

We agree that that must happen. But how can we do that if we don't know what's going to happen with the bond holders and we don't know what's going to happen with the shareholders?

In other words, we all have to get in the same room together. And I'm saying board members, management, suppliers, dealers, creditors, and the equity holders -- get in there together, and then
let's all make equal sacrifice.

But, again, I think the men and women of the UAW, who have worked so hard to help these companies succeed, have made numerous concessions up to this point in time. And we should be given some
recognition and some credit for that.

STEPHANOPOULOS: Several senators and members of Congress who support the auto industry have started to suggest that President-elect Obama hasn't done enough to come in here and forge that kind of
agreement.

Senators Carl Levin, Congressman Barney Frank have said he's got to be more assertive. Do you agree with that?

GETTELFINGER: Well, look, I respect the leadership in the Congress, and I know they're working very hard with the administration. President-elect Obama has made it clear that we can only have one
president in power at a time. I'm sure he's keeping his hand on the pulse of what's going on here. And I'm sure that he is, behind the scenes, having some input.

So we're satisfied with the process. You know, we went through four days of hearings, and we've got that behind us. And I recognize the monumental task that's in front of our Congress and the
administration.

And we just appreciate the fact that everybody's taking a second look at this. Because the industry is so important to our economy.

And, you know, we used to be referred to as the arsenal of democracy. And I just listened to Condoleezza Rice. And if you think about it, after 9/11, it was our U.S. government that came to the auto industry and said, we need your help to keep the economy going.

General Motors said, "Let's keep America rolling." Ford was there; Chrysler was there, because this is, as President-elect Obama, said, the backbone of our economy. And we want to ensure that we
preserve that.

And, George, something that's very important, here -- this is not just a problem that exists in the United States. Countries around the world are considering aid for their auto industry.

And we just need to shore up this industry with this emergency bridge loan -- and that's what it is. People often use the term "bailout," but it's a bridge loan. It's good for Main Street. It's good for side-street America, and it's good for rural America. And we just need to ensure that we get something done this week.

STEPHANOPOULOS: Mr. Gettelfinger, thank you very much for your time this morning.